Europe Wind Market Seen Shrinking for Two Years on Subsidy Cuts

The wind-turbine market in Europe, the Middle East and Africa will shrink this year and next after economic growth slowed and governments scaled back subsidies, Make Consulting said.

The region is set to install 13.3 gigawatts of turbines this year and 12.4 gigawatts next year, down from 13.4 gigawatts in 2012, Make said today in an e-mailed statement. The global market is forecast to contract by about 5 percent this year before rebounding in 2014 with 20 percent growth, it said.

Governments in some of Europe’s biggest wind-power markets have reined in support for renewables in recent years as economies stagnated. Spain halted assistance for new wind projects and the U.K. reduced subsidies, while German Chancellor Angela Merkel is urging reform of the grant system and slowing an expansion of onshore wind to keep costs in check.

“Policy uncertainty in recent months has put a dampener on demand,” Aarhus, Denmark-based Make said in the statement. “As a result, market contraction in the EMEA region is likely to deepen further in 2014.”

Make expects the regional market to rebound later in the decade, reaching 19 gigawatts of installations in 2020. It predicts South Africa, Finland, Russia, Ukraine, Norway, Egypt and Morocco will add a total of 18 gigawatts by then. It also forecasts that most onshore wind power in the region will reach grid-parity by 2020, meaning it’s able to compete subsidy-free with traditional generators.